Stocks Lower into Close on Powell's Post-Election Hawkishness, Tamped Down Runaway US Government Spending Expectations, Forthcoming US Healthcare Corruption Crackdown, Pharma/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average
  

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.0 +13.2%
• DJIA Intraday % Swing .68 -8.2%
  
• Bloomberg Global Risk On/Risk Off Index 61.0 -3.7%

• Euro/Yen Carry Return Index 183.3 -.75%

• Emerging Markets Currency Volatility(VXY) 10.0 -1.1%

• CBOE S&P 500 Implied Correlation Index 20.5 +19.4% 

• ISE Sentiment Index 130.0 -21.0 points
  

• Total Put/Call .94 +4.4%

• NYSE Arms .85 -11.5%
  
• NYSE Non-Block Money Flow -$184.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.7 +1.9%
  

• US Energy High-Yield OAS 319.8 +2.3%
• Bloomberg TRACE # Distressed Bonds Traded 194 +2
  

• European Financial Sector CDS Index 65.38 +1.9%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 159.99 +1.7%
  

• Italian/German 10Y Yld Spread 126.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 72.26 +1.3%
  

• Emerging Market CDS Index 168.0 +1.7%
• Israel Sovereign CDS 132.85 +1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 unch.

• 2-Year SOFR Swap Spread -22.25 basis points -.25 basis point
  

• 3M T-Bill Treasury Repo Spread -26.5 basis points -3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -.25 basis point
  
• MBS  5/10 Treasury Spread 155.0 +4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 684.0 +1.0 basis point
  
• Avg. Auto ABS OAS 57.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.7 -.09%
• 3-Month T-Bill Yield 4.51% unch.
  

• China Iron Ore Spot 96.2 USD/Metric Tonne -.53%
• Dutch TTF Nat Gas(European benchmark) 46.6 euros/megawatt-hour +.7%

• Citi US Economic Surprise Index 43.3 +4.6 points
  

• Citi Eurozone Economic Surprise Index 14.3 -.1 point

• Citi Emerging Markets Economic Surprise Index 1.1 +2.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(462 of 500 reporting) +6.8% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 268.63 +.26:  Growth Rate +15.1% -.1 percentage point, P/E 21.9 -.3
  
• S&P 500 Current Year Estimated Profit Margin 12.60% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +25.7% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 378.29 +.56: Growth Rate +32.9% -.3 percentage point, P/E 32.1 -1.0
  
• Bloomberg US Financial Conditions Index 1.07 -7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.62 +15.0 basis points
  
• US Yield Curve 12.5 basis point (2s/10s) +4.5 basis points
  
• US Atlanta Fed Q4 GDPNow Forecast +2.53% +8.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 31.5% -.9 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% unch.: CPI YoY +2.71% unch.
  
• 10-Year TIPS Spread 2.34 unch.
  
• Highest target rate probability for Jan. 29th FOMC meeting: 53.0%(-5.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for March 19th meeting: 38.6%(+3.3 percentage points) chance of 4.25%-4.5%. (current target rate is 4.5-4.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -601 open in Japan 
• China A50 Futures: Indicating -44 open in China

• DAX Futures: Indicating +68 open in Germany

Portfolio:

• Higher:  On gains in my financial/utility sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure: 25% Net Long